How Are Smart Contracts Secured against Vulnerabilities?
Security is primarily addressed through rigorous auditing by specialized firms before deployment. Formal verification methods can mathematically prove the contract's correctness.
Bug bounties incentivize white-hat hackers to find and report flaws. Despite these measures, vulnerabilities like reentrancy attacks can still occur if code is poorly written.
Glossar
Smart Contract
Code ⎊ The contract is fundamentally self-executing code deployed on a distributed ledger, embodying the terms of the agreement in an immutable format.
Formal Verification Methods
Proof ⎊ The rigorous mathematical demonstration that a piece of software, typically a smart contract, correctly implements its specified properties under all possible valid inputs, offering a higher assurance level than empirical testing alone.
Vulnerabilities
Exposure ⎊ In cryptocurrency, options trading, and financial derivatives, exposure represents the potential for adverse outcomes stemming from inherent structural weaknesses or design flaws within the underlying systems.